Process Costing System-Cost Accounting-Managerial Accounting
What you'll learn
- Comprehend the key concepts and principles of process costing systems in cost accounting, distinguishing them from other costing methods.
- Classify costs effectively, understanding different cost classifications and their importance in process costing.
- Outline the step-by-step flow of costs in a process costing system, from raw materials to finished goods and cost of goods sold.
- Differentiate between job cost systems and process cost systems, and determine the appropriate system for specific manufacturing scenarios.
- Apply overhead accounting principles, including calculating predetermined overhead rates and allocating overhead costs to departments.
- Record accurate journal entries related to costs in a process costing system, including transfers, direct and indirect wages, overhead costs, and sales transact
- Calculate the cost per equivalent unit and allocate costs to ending work-in-process and transferred-out amounts using both FIFO and Weighted Average methods.
- Explain key terms and definitions related to job cost systems, enhancing practical understanding and application.
- Analyze process cost statements, interpreting the data to gain insights into cost control, performance evaluation, and managerial decision-making.
- Basic Knowledge of Managerial Accounting: Familiarity with fundamental concepts in managerial accounting will provide a solid foundation for understanding the principles and techniques covered in this course.
- Understanding of Cost Concepts: Prior exposure to cost concepts such as direct costs, indirect costs, fixed costs, and variable costs will help in comprehending the nuances of cost accounting in process costing systems.
- Knowledge of Financial Statements: Basic knowledge of financial statements, including balance sheets and income statements, will aid in understanding the relationship between cost accounting and financial reporting.
- Motivation to Learn: A genuine interest in cost accounting, manufacturing processes, and managerial decision-making is essential to engage with the course material and achieve the learning objectives.
Welcome to this course, where we delve into the intricacies of cost accounting in manufacturing companies utilizing process costing systems. This comprehensive course introduces you to managerial accounting topics specific to process cost systems and equips you with the essential knowledge and skills required for accurate cost classification, tracking, and allocation.
Starting with an overview of managerial accounting and cost accounting concepts, we explore the classification of costs and the significance of categorizing costs in various ways. Understanding the flow of costs through the accounting process in a manufacturing company is crucial, and we provide a comprehensive outline of this process.
We compare and contrast the two primary inventory costing systems used in manufacturing companies: job cost system and process cost system. You will gain insights into the circumstances in which each system is used, helping you identify the most suitable approach for different manufacturing scenarios.
In our exploration of the process cost system, we meticulously trace the flow of inventory costs. We track costs related to raw materials, their progression through work-in-process and factory overhead, their transformation into finished goods, and their ultimate expensing as cost of goods sold.
The course covers the concept of overhead and its importance, including the distinction between actual overhead incurred and estimated overhead applied to departments. You will learn how to calculate predetermined overhead rates and utilize them to estimate overhead allocated to different departments accurately.
Recording journal entries related to costs within the process cost system is a critical aspect, and we guide you through each step. You will gain hands-on experience in entering journal entries for the transfer of raw materials, direct and indirect wages, overhead costs, allocation of overhead to work-in-process, department transfers, finished goods, sales transactions, and cost of goods sold.
We delve into the calculation of the cost per equivalent unit and the assignment of costs to ending work-in-process and transferred-out amounts. We explore both the First In First Out (FIFO) and Weighted Average methods, ensuring you have a comprehensive understanding of cost allocation techniques.
Throughout the course, we provide clarity on key terms and definitions related to job cost systems, enhancing your practical knowledge and application of cost accounting concepts.
In addition to the instructional videos, the course includes a range of valuable resources, including downloadable PDF files for offline reference, preformatted Excel practice files to facilitate hands-on learning and reinforce Excel skills, multiple-choice practice questions to improve test-taking abilities, short calculation practice questions for concise problem-solving, and discussion questions for engaging in meaningful conversations with fellow students.
Your instructor, a seasoned professional with expertise in accounting concepts and software, is a Certified Public Accountant (CPA), Chartered Global Management Accountant (CGMA), and a curriculum development expert. With a wealth of practical experience and teaching proficiency, the instructor is committed to helping you achieve your learning objectives.
If you're an accounting student, aspiring accountant, business owner, or professional seeking to enhance your cost accounting skills, this course provides the comprehensive knowledge and practical tools needed to master process costing systems and make informed managerial decisions. Enroll now and embark on a transformative learning journey in cost accounting!
Who this course is for:
- Accounting Professionals: Accountants, financial analysts, and professionals working in cost accounting roles can benefit from this course to deepen their understanding of process costing systems, enhance their cost analysis capabilities, and make informed managerial decisions.
- Students of Accounting and Finance: Undergraduate or graduate students pursuing degrees in accounting, finance, or related fields will find this course valuable in supplementing their classroom learning and gaining practical insights into cost accounting in manufacturing companies.
- Business Owners and Entrepreneurs: Entrepreneurs, business owners, and managers of manufacturing companies can acquire a comprehensive understanding of process costing systems, enabling them to effectively manage costs, optimize resource allocation, and make informed business decisions.
- Aspiring Accountants: Individuals aspiring to pursue a career in accounting or finance, especially in manufacturing or cost accounting roles, can use this course to gain a solid foundation in process costing systems and differentiate themselves in the job market.
- Lifelong Learners: Curious learners with an interest in cost accounting, manufacturing, and managerial decision-making can enroll in this course to expand their knowledge and gain practical skills that can be applied in various professional contexts.
Through working with students from many different schools, Mr. Steele has learned best practices for helping people understand accounting fast. Learning new skills and finding the best way to share knowledge with people who can benefit from it is a passion of his.
Mr. Steele has experience working as a practicing Certified Public Accountant (CPA), an accounting and business instructor, and curriculum developer. He has enjoyed putting together quality tools to improve learning and has been teaching, making instructional resources, and building curriculum since 2009. He has been a practicing CPA since 2005. Mr. Steele is a practicing CPA, has a Certified Post-Secondary Instructor (CPI) credential, a Master of Science in taxation from Golden Gate University, a Bachelor’s Degree in Business Economics with an emphasis in accounting from The University of California Santa Barbara, and a Global Management Accounting Designation (CGMA) from The American Institute of CPA (AICPA).
Mr. Steele has also authored five books that can be found on Amazon or in audiobook format on Audible. He has developed bestselling courses in accounting topics including financial accounting and QuickBooks accounting software.
In addition to working as an accountant, teaching, and developing courses Mr. Steele has helped create an accounting website at accountinginstruction, a YouTube channel called Accounting Instruction, Help, and How Too, and has developed supplemental resources including a Facebook Page, Twitter Page, and Podcasts that can be found on I-tunes, Stitcher, or Soundcloud. Mr. Steele's teaching philosophy is to make content applicable, understandable, and accessible.
Adult learners are looking for application when they learn new skills. In other words, learners want to be able to apply skills in the real world to help their lives. Mr. Steele’s formal accounting education, practical work experience, and substantial teaching experience allow him to create a curriculum that combines traditional accounting education with practical knowledge and application. He accomplishes the goals of making accounting useful and applicable by combining theory with real-world software like Excel and QuickBooks.
Many courses teach QuickBooks data entry or Excel functions but are not providing the real value learners want. Real value is a result of learning technical skills like applications, in conjunction with specific goals, like accounting goals, including being able to interpret the performance of a business.
Mr. Steele makes knowledge understandable by breaking down complex concepts into smaller units with specific objectives and using step by step learning processes to understand each unit. Many accounting textbooks cram way too much information into a course, making it impossible to understand any unit fully. By breaking the content down into digestible chunks, we can move forward much faster.
Mr. Steele also makes use of color association in both presentations and Excel worksheets, a learning tool often overlooked in the accounting field, but one that can vastly improve the speed and comprehension of learning accounting concepts.
The material is also made understandable through the application of concepts learned. Courses will typically demonstrate the accounting concepts and then provide an Excel worksheet or practice problems to work through the concepts covered. The practice problems will be accompanied by an instructional video to work through the problem in step by step format. Excel worksheets will be preformatted, usually including an answer tab that shows the completed problem, and a practice tab where learners can complete the problem along with a step by step presentation video.
Mr. Steele makes learning accounting accessible by making use of technology and partnering with teaching platforms that have a vision of spreading knowledge like Udemy.